"Economist": A Recession in Europe is Inevitable, Bulgaria will be among the Most Affected

Recession in Europe in the winter of 2022-2023 due to the energy crisis is now inevitable. Bulgaria will be one of the countries that will suffer because of the shrinking demand for its products in the EU. As well as because it stands out as an economy with very inefficient production processes, consuming a lot of energy - two and a half times above the average for the European Union, and this is very expensive.

This is the conclusion of the "Economist Intelligence Unit" in a report from last week, predicting that gas imports from Russia will not recover even with a cold winter and failed European solidarity - slow or blocked sharing of gas reserves between member countries - the EU economy will shrink.

Even if countries cut consumption, high energy prices will cause serious damage. This will also be felt in countries that are not dependent on Russian gas (Spain and Great Britain, for example), for which the EIU adjusts downward the expected growth by between 0.5% and 1.5% of GDP.

For Bulgaria, there is a worsening of inflation expectations. After almost 17% in June - the highest in 24 years - analysts expect it to continue to accelerate in the third quarter and the high cost of energy (+37.5% growth in transport costs and +18.5% in household bills) and the increase in the price of food (+23.8%) are key factors for this. The trend was towards slowing down the growth of inflation, and the state softened the effect for both businesses and citizens, until the Energy and Water Regulatory Commission approved in July another increase in the price of electricity and central heating.

Again, because of the high gas prices for Europe, there will be a significant correction of the inflation forecast in Bulgaria next year - from 4.7% to 6%. (with a...